We thank readers for their diverse and sometimes intense responses to our recent comments about marijuana legalization in California and about the reversal of a US policy.
The link to that piece is here: http://www.cumber.com/california-high-on-cannabinoid-wellness/.
Many good points and counterpoints were argued. Some of them are quoted below.
Our position of supporting change is rooted in the failure of policy over decades. When a substance is illegal and desired, the price rises in a black market. High prices attract criminal risk takers. Murder and mayhem follow, as we see in country after country confronting drug cartels.
With increasing legalization we now see price suppression with marijuana. The cost of criminality attached to marijuana usage and distribution has been reduced or eliminated. Those who want to be “high” can do so without stealing a car or snatching a purse. Meanwhile, those seeking a medical benefit from cannabinoids may obtain it.
Americans are often polled about marijuana legalization. The overwhelming majority support it. And nearly ALL AMERICANS support medical usage with supervision and prescription. That is why 8 states now permit recreational use and 29 permit medical applications. Both numbers seem destined to rise.
We recall that in 1933 Prohibition (of alcohol) was repealed and alcohol regulation was delegated to each state. Criminal activity associated with alcohol became a closed chapter in the history of whisky and wine. Today both are supervised and regulated and generate tax revenue for many levels of government.
Yes, there are still drunken drivers. Yes, there is abuse. And yes, things are much improved from the machine-gun era of US history, which is now just the subject of films that appear on the classic movie channels.
Why not repeat this with marijuana? Take out the crime. Remove the financial incentives for criminals. And deal with drug addiction and substance abuse with new approaches.
Who wins? Government does, because it spends less on prisons and more to help citizens have productive employment. Taxpayers also win, with reduced levels of violent and invasive crimes. Who loses? Contract prison operators and criminals who prey on habitual users. Also players in the marijuana business that cannot succeed when the price is low and only succeed when artificially induced scarcity raises the price and induces criminality.
Other views are below. We are glad to have triggered the debate.
Bill A. wrote:
“David, I guess that at age 89 I am just too old fashioned in rolling my eyeballs on this whole marijuana issue. We have spent billions of taxpayer dollars on "the war on drugs" and the war on cigarette smoking, and now we are promoting the use of a drug which can and will be smoked. I can see the use for medical purposes, but what makes us think that usage will be controlled any better than that of opioids???
“My opinion is that approval for recreational usage is insane and will create both medical and safety problems.
“The New York Times reported earlier this week that in Colorado traffic deaths among drivers who tested positive for marijuana had doubled from 2013 to 2016 and that visits to emergency rooms for marijuana users had increased by 35%. What is going on among young people in this country is bad enough without turning out a nation of legal hopheads.”
Michael W. wrote:
“I agree with legal use of pot for medical purposes. I agree that arresting people for pot is a waste of time.
“But, I have seen the effects of prolonged use to be high, a complete lack of drive and motivation follows, ask Tom Keene, he said he watched it destroy lives while in college.
“For me, I watched my older son progress from pot all the way to complete opioid addiction, for him it was a gateway drug.
“I can have a glass of wine and be fine, other than medical purposes to use pot is to be high.”
Marc G. wrote:
“I have no expertise with medical marijuana but appreciate its efficacy.
“I am antagonized by the wave of legalization for recreational use. The data from Colorado is highly disturbing to me as a parent and a grandfather. The Obama administration left us in a dangerous place in relation to drug usage.
“We need a national discussion; I support our AG but sense that you do not.”
Dr. John S. wrote:
“I notice you don’t quote any peer-reviewed medical studies regarding medical marijuana. I also notice that you blur the lines between the labels of recreational use and “medical” use. Why? You have “seen it work for seizures”? This is a silly statement. It’s not scientific. We have effective treatment for seizures. Perhaps what you saw was efficacy in the case of non-epileptic seizures? Poor.”
Lee D. wrote:
“ ‘[Kotok wrote:] By yearend, 8 states will have recreational Marijuana; 29 will have medical usage. Meanwhile a reversal of established policy gives an “in your face” to the majority of the country. That is the result of the latest gesture by the US Attorney General Jeff Sessions.
‘CNN summarized as follows: “In a seismic shift, Attorney General Jeff Sessions will announce (he subsequently did -Ed) Thursday that he is rescinding a trio of memos from the Obama administration that adopted a policy of non-interference with marijuana-friendly state laws." CNN goes on to say, "While many states have decriminalized or legalized marijuana use, the drug is still illegal under federal law, creating a conflict between federal and state law." ’
“CNN’s take misses the mark as usual. The responsibility for law resides in Congress. Congress can change the law any time they so decide. All Sessions did is bring the Justice Department back to enforcing existing law. Policies of the previous administration to circumvent and manipulate government in unconstitutional ways were always going to be temporary as long as no laws were changes to make them permanent. This is a key feature of the ‘Swamp’ that Trump supporters are so adamant about fixing.
“Thanks for the quoting of my response to a previous post. Glad your family has experienced the benefits of the rapidly progressing marijuana derivatives evolution. I assume you are familiar with the CBD (Cannabidiol) derivative which is virtually devoid of the psychoactive components and yet seems to have beneficial effects for pain management, and joint comfort (in my own experience). We live in a time a rapid change. Let’s do our best to support legal changes that enable further progress and definitively leave behind the manipulations used by weak leaders and timid legislators that failed to really address problems, swept too many things under the rug and repeatedly ‘kicked the can down the road’.
“PS - appreciate the link to CB1 Capital LLC Newsletter - had not come across them before.”
Frank M. wrote:
“I suspect one of the first Sessions targets will be a local credit union in Seattle that accepts deposits and has accounts with marijuana dealers licensed by the state.”
David B. wrote:
“My daughter lives in Colorado with three dogs. Her oldest dog has lived on for many years – he’s a big bull dog and 13 years – with various tumors that she has treated with a special kind of medical marijuana that they sell in Colorado dispensaries. To the surprise of the Vet the tumor has shrunk and gone away and the dog acts in many ways like a younger dog despite his size and weight. If you believe Rebecca the government has research confirming the cancer treating properties of special forms of cannabis and suppresses it.
“It is a shame that we are happy to have massive fire power on untrained individuals, beer and liquor openly available, but can’t let a rather benign drug be treated with the same understanding.”
Dale K. wrote:
“I live in Colorado part of the year. I’ve witnessed what you describe. And I’ve had personal experience and do charitable work to rescue folks. I just don’t write about it often. Criminalize any substance and we raise the price, incentive crime and impose high societal cost. That policy has failed in America after decades of trying. This legalization process is underway, as we know. It, too, has flaws. We shall see.”
David F. wrote:
“You people are all nuts. Although medical marijuana use may help some with pain relief this overall embrace of this drug is nonsense. Dope makes you stupid and increased use will make the majority of users dumber than wood. Dr Michael Savage knows of what he speaks and I suggest you learn more before jumping on this stupid horse. Jerry Brown and the rest of these lunies will ruin the country.”
(Kotok responded:
“Thank you. I guess you prefer murder and mayhem by making this substance illegal. That creates artificial scarcity value by raising the price and thereby incentivizing criminality.
“We tried that for decades in America. We incarcerated millions of folks. We created an entrenched taxpayer-funded special-interest business to operate the prisons.
“I wonder who is the nut.”)
Liz W. wrote:
“Thank you for taking the time to share your thoughts on Sessions’ rolling back the Cole memo deprioritizing marijuana crimes. This seems at first glance to be contrary to the wishes of many Americans including those of us who have seen marijuana's medical benefits firsthand – or who voted for Gary Johnson in the last election. However, the action – casting aside a policy promulgated post legislation – seems more in line with the rule of law, whether or not that was Sessions' intent. Perhaps a more ‘judicious’ action would be for Congress to rescind federal laws and regulations over areas best handled at the state level. Similarly, the practice of lowering charges, e.g., in drug cases, to avoid mandatory sentencing laws begs the question, ‘Why are we not changing the law rather than recasting the crime?’
“The Wired article linked below provides another view you might find of interest – and possibly comfort.” (https://www.wired.com/story/sessions-legal-weed-crackdown-startups)
Byron W. wrote:
“Sessions is out of touch and is missing the sweep of history. He will succeed in further reducing the respect for federal power, enhancing states rights. If not careful he will further empower civil disobedience. He’s missing what US denizens do in their daily lives, he missed the anthro 101 observation of man’s universal need for intoxicants, and he’s clueless to the real-time social agglomeration and reinforcement powers of the internet. On the opposite side, Congress is a bit more sensitive to the flow of power. And maybe, just might write legalizing legislation. Either checkmating Sessions or falling for the bait of the evil geniuses manipulative powers to get Congress to act.
“Yesterday Trump tossed yet another bizarre career-limiting (except for Trump) non-presidential bit of meat into the grinder.
“Trump’s defense of himself as ‘a very stable genius’ is an example of the perils of unchecked self-esteem (and he’s arguably neither stable nor a genius). Ironically, could the tipping point in the Republican voter revolt away from this president and the party may be from Sessions’ recast ganja policy? Too many have tried pot, find it helpful, and fear the ravages of cancer without it. Pocket book, medicine, relief from pain are powerful motivators. As is simply the recreational aspect. The public has been clear on this since 1968. We are retiring now, we tolerate alcohol a lot less. We like a quality spliff when we want one. No ambiguous street weed for us, we have standards, we have needs. We are gourmet not fast food. We are older, wiser, grumpier, less tolerant of hurdles to our well being, and we vote. #GoodGanjaMatters, #WeedWantsToBeFree, #MedicateMe, #EarlyOnsetCrankiness. First amendment, second amendment, smeckle amendment pale in our need to celebrate the sacraments of the blessed herb.
“A ramblin’ rant from a former Wall Street analyst. I appreciate your work and opinions, and not because they are always the same as mine. Keep on keepin’ on.”
Robert K. wrote:
“I also seek clarity and as much veracity as can be obtained from available, credible information.
“In other words, I try to align the strength of my beliefs with the quality of the supporting data.
“I fully recognize the distress involved in the circumstances surrounding a diagnosis of cancer. However, having administered cancer chemotherapy to thousands of patients, and in the process helped a few, I can assure you that chemotherapy does not cause ‘pain.’ It causes many side effects, some ugly, but not pain as the term is generally employed. Suffering, perhaps, when added to the suffering intrinsic to the underlying disease, unless a favorable effect is achieved, which still, regrettably, is not often enough.
“In the 1970s, as a trainee at the National Cancer Institute, NIH, I participated in a trial of delta 9-THC, purified from crops grown on US government farms, for Rx of nausea in childhood acute leukemia patients. They still vomited, but according to them, it was beautiful. In 1985, the drug MARINOL (dronabinol capsules, USP, synthetic delta-9¬ tetrahydrocannabinol [delta-9-THC] was approved in the US for Rx of nausea related to chemotherapy (and is still on the market). Older people, like us, do not do well on it – mental adverse reactions – however, it never did well because there are MUCH better, highly effective anti-nausea meds with much less side-effect problems available.
“In truth, we know almost nothing about cannabis – probably hundreds of unique chemicals within the multiple species.
“Personally, I expect the medicinal use of cannabis to dwindle as synthetic versions of the active ingredients are developed. Recreational uses, and ‘needs,’ probably will easily be addressed by the use and availability of the whole plant. The astute buyer will rapidly be ‘growing their own’ and won't need ongoing purchases, except maybe for special events! I wish I knew enough of the commercialization being implemented to short these new ‘businesses.’
“Even more important, especially in the weed imported from south of the border, there are impressive levels of pesticides, DDT, etc. being consumed by the public – but, but ‘It's organic – it's NATURAL.’
“ ‘Caveat inhaler.’ ”
Joe Z. wrote:
“Regarding the Medical Use of any Medication, one of the most important things that I’ve learned as a licensed physician for the past 46 years: The patient is always right. If they say a drug works, then it works.”
Finally, Dennis Gartman wrote, in today’s Gartman Letter:
“We are openly opposed to the legalization of marijuana here at TGL, despite the fact that we are libertarians in almost all instances and libertarians on balance support legalization of it and many other drugs. But we have seen the dangers of drug usage and despite the arguments otherwise we are of the belief that marijuana usage is detrimental to health and welfare. Let the Millennials and others younger than we argue otherwise; we’ve seen what we’ve seen and it is rarely if ever benign.
“However, we are even more opposed to federal government trampling upon states’ rights, for we are even greater believers in the rights of the individual states to make their own decisions on these sorts of questions. It is up to the states to decide on alcohol consumption; it is up to the states to decide who can and who cannot drive in that state; it is up to the states to decide the questions regarding marriage; it is up to the states to decide how and where they will educate their children, these things are not up to Washington to decide. These are the things that the citizens of Virginia, or Massachusetts, or Ohio, or Iowa or California are to decide. These are state’s rights.
“Hence, although we would openly oppose any attempts by Virginia, where we live, to legalize the use of marijuana, for we do indeed believe that allowing it to be used widely by the states citizens and youths can be and will be deleterious to the state. However, it is up to the voters of Virginia or the legal elected legislature to make that decision, and if the “people” of Virginia make that bad decision it is up to us to either move to another state or to make our peace with that decision. The voters of Colorado, California, Oregon, Washington and Nevada have chosen to allow their citizens to imbibe in marijuana and that is the right of the citizens there to make that ill-advised decision. If the citizens of these states wish to expose themselves to “impaired” drivers or to expose themselves to “slacker” labor forces, then that is their right and it is our duty to defend that right. In the end, rest very much assured that Colorado, California, Oregon, Washington and Nevada will see their states deteriorate; businesses will fail; tax revenues will fall; deficits will rise and populations will fall... but again, that is their choice. It is not Washington’s choice to make and it is not the right or the obligation of the US Attorney General to intervene.
“We shall make enemies with this comment; so be it. It won’t be the first time and certainly it won’t be the last. But we know this: we won’t be investing in the drug culture. Others may get wealthy buying marijuana stocks. We wish them well. We pass.”
We thank all readers for their responses and especially Dennis for permission to quote his morning missive.
David R. Kotok
Chairman and Chief Investment Officer
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